How To Establish an Asset Protection Trust

The objective of an asset protection trust is to considerably reduce your financial profile. It is a contract between a Grantor (the person with the assets) and a Trustee (the person who will manage it), which is a legal entity in which it is created. Asset protection is the simplest way to safeguard your assets in cases where there is a threat to them. It is also the most expensive. These are just simple plans to make avoid employing the services of experts and attonrneys if the circumstances suddenly spin against you.

Here are some tips you can follow in establishing an asset protection trust:

  • First, to not boast of your wealth. Just maintain a low profile. Don't be luxurious. And, importantly, do not register your assets under your name.
  • If you have several assets, register them with different legal entities. This will more significantly protect you from different creditors.
  • As much as possible, avoid partnerships. There is a high possibility that having partnerships in your assets can drag you in some kinds of legal problems and it will be you and your asset that will suffer in the end.
  • Research about liability laws. These laws can vary in each state. Once you create your trust, it is very necessary that you, as the Grantor, are careful in checking the political state of the offshore country you are in. Different rules regarding this can transform rapidly so you would need to remain observant if there will be any procedure that will occur to no longer recognize your asset protect trusts. As such, you must be prepared in relocating your funds to asset protection trusts in a new jurisdiction if such things will happen.
  • Choose jurisdictions that apply the English common law over civil law.

There are of plenty of available places that do so, but this is advantageous because English court structure is most likely with that in the United States. If certain legal actions will occur, this jurisdiction will be very helpful since you are more familiar with it, being in the same with the jurisdiction system in your country.

  • Maintain liability insurance. Though you have planned out perfect fail-safe asset protection trust plan, it is still important that you should maintain liability insurance. The reason behind this is that if something untoward will occur, you liability insurance will be your best protection.
  • Decide on a lower tax or tax-free offshore jurisdiction. This can be very helpful in keeping a little more money in your pocket and is an indication that the offshore jurisdiction truly values your investment.
  • Never fully trust your financial advisor. Remember that money is the root of all evil. Anyone can betray you as long money is involved. So, never trust anyone with your money. Always learn from history about the different trickery that has occurred with these things

By having these various tips in mind, you should be prepared enough in establishing an asset protection trust that will work well for you.


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